California to lose 10 weeks of federal jobless benefits

California’s longer-term unemployed are on the verge of losing 10 weeks of federal jobless benefits, thanks to the state’s falling jobless rate.

The cut will reduce the maximum weeks of benefits available to 63 from 73. At the worst of the recession the maximum was 99 weeks, but that has been coming down as a result of falling unemployment and cuts to the federal extended benefit program.

When people lose jobs they generally are entitled to up to 26 weeks of state benefits. Since the recession began, the federal government has paid for extended benefits, which come in tiers of varying duration. When a person exhausts state benefits, if they are still unemployed they can begin receiving the first tier of federal benefits. When that runs out, they move on to the second tier and so on until they have exhausted all tiers.

A fifth round of federal benefits, known in California as Fed-Ed, expired in May 2012, leaving only four tiers of federal benefits. To maintain the fourth tier, a state’s unemployment rate must average at least 9 percent for the most recent three months. California will likely drop below that level when its June unemployment rate is announced Friday. Its rate was 8.6 percent in May and 9 percent in April.

EDD expects the U.S. Department of Labor (DOL) to send notice on Friday that California no longer qualifies for tier 4.

Assuming that happens, anyone starting a tier 4 extension before August 11 can continue receiving those benefits until they are exhausted, but anyone who would have filed a tier 4 extension on August 11 or later will receive no further benefits.

All federal extended benefits are set to expire at the end of the year. Unless Congress extends them again, federal benefits will terminate for everyone Dec. 29 no matter where they are in a tier, leaving the unemployed with up to 26 weeks of state benefits.

The EDD estimates that more than 100,000 Californians are collecting tier 3 benefits and will be the first to be impacted by the loss of Tier 4 eligibility. “Once we receive notification from the DOL, the EDD will send a letter to these individuals advising them that Tier 4 benefits are no longer available. Claimants on extension Tiers 1 and 2 could also eventually be impacted,” EDD said in a press release.